India defers its retaliatory tariffs on American products yet again

According to The Financial Express report, India is likely to defer the levy of retaliatory tariffs to another 30 to 45 days from the revised deadline of January 31, 2019. This will be the fifth time that India would postpone its tit-for-tat duties worth close to US$235 million on 29 American products.

New Delhi had initially planned to impose the retaliatory tariffs from August 4, 2018, but later on postponed to September 18, in a bid for the two nations to find a mutual solution. The Government then again deferred the deadline to November 2 and December 17.

The Indian Government is repeatedly extending the tariffs deadline with an expectation to keep a tariff war between the two countries from flaring up, at least temporarily. Washington already raised the stake in its trade war against Beijing by announcing extra tariff on around 6,000 Chinese goods worth $200 billion in December.

According to sources, as part of the trade package, the United States wants India to remove price cap on bioresorbable stents and remove or substantially prune the import duties on key ICT products, including high-end mobile phones and smart watches.

Given the fact that the US accounts for only 2 per cent of India’s annual imports of the seven ICT products, the demand for duty waive or cut has baffled the officials in India.

The US is also seeking to use the concessional tariff it offers to India and a number of other countries under its generalised system of preference (GSP) to extract greater market access from New Delhi. In November, the US dropped as many as 50 Indian goods from the list of items, supplies of which were earlier eligible for concessional tariff under GSP.

Commerce and industry minister Suresh Prabhu will hold bilateral discussions on trade issues with the US Commerce Secretary Wilbur Ross on February 14, 2019 in New Delhi.